New Company

ballyclover

Hi Guys

I have been studying for advanced qualifications in order to further my career and improve my situation.

I am now in a position to begin to think about setting up my own company.

I will continue in full time employment for the time being while my idea takes hold and i begin to bring in contracts. I do not expect to be earning a living wage for at least 2 years, or at least that the target i am setting. I intend to offer my services for free or low cost to local employers to enable me to get my idea up and running. These will be on an evening or weekends

I wish to register as a limited company with company house.

I am looking for alittle advice. Am i able to register a ltd company but not activate it until i am in a position to begin charging and taking money, whether this is the low cost charges i am planning or larger contracts i may win?

In the short term i am planning on offering my service for free, but would like to charges purchases to the company.

Thank you for your help in advance

Paul

Savvy_Sue

If you believe your services are worthwhile, charge for them.

ballyclover

No, I don't want to charge to begin with as I need to build up a portfolio of work. I have not planned to charge to begin with anyway.


I just need to know in regards to registering a Ltd company but not activating it

InsideInsurance

If the company isnt active how can it be accruing costs?

Either you start trading, the costs go to the company and it makes a loss year 1 that you carry forward to year 2 or it isnt trading therefore doesnt have any expenses and you are acting as a sole trader in the mean time in which case any charges go into your sole trader section of you Self Assessment.

There may be some difference depending on if you are talking about capital or expense charges

zygurat789

ballyclover wrote: »

Hi Guys

I have been studying for advanced qualifications in order to further my career and improve my situation.

I am now in a position to begin to think about setting up my own company.

I will continue in full time employment for the time being while my idea takes hold and i begin to bring in contracts. I do not expect to be earning a living wage for at least 2 years, or at least that the target i am setting. I intend to offer my services for free or low cost to local employers to enable me to get my idea up and running. These will be on an evening or weekends

I wish to register as a limited company with company house.

I am looking for alittle advice. Am i able to register a ltd company but not activate it until i am in a position to begin charging and taking money, whether this is the low cost charges i am planning or larger contracts i may win?

In the short term i am planning on offering my service for free, but would like to charges purchases to the company.

Thank you for your help in advance

Paul

An Ltd has a date of incorporation and has to file accounts from that date, the accounts may be dormant company accounts if thee has been no activity but they must be filed.
Why do you want to be an Ltd, it is usually easier to start as a sole trader?

Mistral001

If you are not charging for your services, then you are operating as an amateur and you are not trading as far as I can see. You are not even a sole trader.


Whenever you decide to offer your services professionally (ie. charge for them), then consider your options I suggest and I would not rule out the sole trader option. That way you will be able to keep your trading more confidential.

Pennywise

There are only two "states" of a limited company. Either it's dormant or it isn't. Dormant basically means no transactions. So if you start putting expenses through it, it's not dormant, which means you have to file accounts every year, submit a corporation tax return, etc.

DKLS

ballyclover wrote: »

No, I don't want to charge to begin with as I need to build up a portfolio of work. I have not planned to charge to begin with anyway.


I just need to know in regards to registering a Ltd company but not activating it

I would start by seriously reviewing your business plan and validating your idea before you start thinking of companies house.
2 years before you see a wage isn't ideal nor is giving away your IP or time.

Samsonite1

Just in case it is useful advice - a long time ago, I tried offering services and products (IT related) for free to local businesses - not a single one was interested. I had graduated from university and had a year of work experience in the field under my belt. It seems that business think that free services are not worth it as silly as that may sound.

Perhaps choosing a competitive rate and offering a lower introductory rate or no win, no fee type of arrangement, e.g. there is a price but they have the right not to pay if they are not satisfied.

PlutoinCapricorn

What are your reasons for incorporating as opposed to being a sole trader?

Most people in full-time employment who do freelancing in their spare time start as sole traders, all the more if they are offering services as opposed to buying and selling items.

What does your contract of employment say about taking on additional work? Even if you are not in direct competition, there may be problems with tiredness and lack of concentration.

paddyrg

If your service is free, I might assume it's got hidden/inflated back-end costs.

If you don't charge, we may not actually form a contractual exchange - how do I sue you if you cause damage?

I suggest a token fee is better than none at all